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Ethics Resource Center Report: Retaliation: When Whistleblowers Become Victims
Library of Congress Cataloging-in-Publication Data ISBN 978-0-916152-20-8 This report is published by the Ethics Resource Center (ERC). All content contained in this report is for informational purposes only. The Ethics Resource Center cannot accept responsibility for any errors or omissions or any liability resulting from the use or misuse of any information presented in this report. ©2012 Ethics Resource Center. All rights reserved. Printed in the United States of America. Additional copies of this report and more information about per mission and licensing may be obtained by calling 703-647-2185 or by visiting www.ethics.org/nbes. © 2012 ETHICS RESOURCE CENTER | III NBES SPONSORS RETALIATION: WHEN WHISTLEBLOWERS BECOME VICTIMS was conducted with the generous support of: and The findings and conclusions of this report are those of the Ethics Resource Center alone and do not represent the views of the sponsors of this research project. For more information about how to support the NBES or other ERC research projects, please visit www.ethics.org. To support the NBES or other ERC research projects, please visit our website www.ethics.org. About the National Business Ethics Survey® (NBES®) The National Business Ethics Survey® (NBES®) generates the U.S. benchmark on ethical behavior in corporations. Findings represent the views of the American workforce in the private sector. Since 1994, the NBES and its supplemental reports have provided business leaders a snapshot of trends in workplace ethics and an identification of the drivers that improve ethical workforce behavior. With every report, ERC researchers identify the strategies that business leaders can adopt to strengthen the ethical cultures of their businesses. To view past issues of the NBES, please visit our website at www.ethics.org/nbes. The Ethics Resource Center (ERC) is America’s oldest nonprofit organization devoted to independent research and the advancement of high ethical standards and practices in public and private institutions. Since 1922, ERC has been a resource for public and private institutions committed to a strong ethical culture. ERC’s expertise informs the public dialogue on ethics and ethical behavior. ERC researchers analyze current and emerging issues and produce new ideas and benchmarks that matter — for the public trust. Introduction Retaliation: Why Does It Matter? A Long-Term Look at Retaliation and the Troubling Picture it Paints Not All Reports Are Created Equal: Reporting Location(s) & Retaliation Under Pressure: Situations That Put Employees at Risk Who Is at Greatest Risk? The (Changing) Profile of the Victim No Good Deed Goes Unpunished? What Can Be Done About It? Factors Linked to Lower Retaliation Rates What Is a Leader to Do? Steps That Management Can (& Should) Take Appendix: Other Findings and Trends 1 3 5 6 7 8 12 13 16 18 Table of Contents © 2012 ETHICS RESOURCE CENTER | 1 RETALIATION: WHEN WHISTLEBLOWERS BECOME VICTIMS If only she’d walked by a few minutes earlier, or a few minutes later, she wouldn’t be in this mess. But she did walk by – right then – at that unfortunate moment. She heard what she heard, and now she is stuck dealing with it. She knows that someone has to do something about the situation and, it seems, she’s going to have to be that someone. A few days later, she reports what she overheard to her supervisor. He acknowledges the seriousness of the allegation, promises to protect her anonymity, and vows to keep her as informed about the investigation as he is allowed to by policy. A few weeks pass and she hears nothing. Finally, her supervisor notifies her that management determined there’s not enough evidence to go forward. The next month, she learns she is being transferred to an office with lots of problems and a terrible reputation. Within a year, she decides to return to a previous employer with whom she’d maintained a good relationship. When her friends at work inquire about why she is leaving, she reveals the shocking things she heard, the way her supervisor promised to look out for her and didn’t, and how the sudden transfer was the last straw. After hearing her story, her colleagues look at their managers – their whole workplace – in a new way. Not that it was perfect before, but now people are getting away with things that are clearly wrong; management stands up for the people with power, but no integrity, and pushes out people who try to speak up. Her two closest coworkers, both trusted and respected employees, stop speaking their mind at meetings and become less and less invested in their company and their work. Within a year, they, too, choose to leave. RETALIATION AGAINST WHISTLEBLOWERS 2 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION It’s the kind of thing that happens every day in work- places across America. An employee stumbles upon a troubling situation, then does the right thing and reports it to her1 supervisor. Management tries to handle it in the best way possible, but the employee feels like she has not been heard. She has a negative experience at work, which she feels must be related to her report, and sees it as a sign that the supervisor she entrusted to report to has now set her adrift. Her positive view of management, her commitment to her company, and her connection to work fade. And, even if she does stay with the company, she will have formed an opinion about ‘how things are re- ally done around here’ and will be unlikely to report ever again. Her attitude might be noted by other employees and may discourage them from taking appropriate action. The 2011 National Business Ethics Survey® (NBES®) revealed that nearly half (45 percent) of employees ob- serve misconduct each year. The majority (65 percent) of those who observe misconduct report it. Unfortunate- ly, more than one in five (22 percent) employees who reports perceives retaliation for doing so. Additional research conducted on the NBES dataset reveals that, 1. Because both men and women experience retaliation, we will use both masculine and feminine pronouns throughout this report. Unless otherwise noted, comments and findings refer to both genders, regardless of which pronoun is used in a particular sentence. not only is retaliation on the rise nationally, it is rapidly becoming an issue even at companies with a demon- strated commitment to ethics and integrity. The rapid rise in retaliation is troubling on a number of levels. The 2011 data from the NBES research revealed some additional findings. Most importantly: Employees who feel more secure and supported (who are more likely to report misconduct) are more likely to experience retaliation; The more an employee persists in reporting a concern, the more likely he/she is to experience retaliation; and Where an employee chooses to report also makes a difference. Furthermore, whistleblowers2 whose reports are sub- stantiated are equally likely to experience retaliation as those whose claims are not. 2. At Ethics Resource Center (ERC), we use the terms “reporter” and “whistleblower” interchangeably to refer to employees who report observed misconduct, either internally or externally. Some argue that they are distinct groups of people. Yet our data reveals that “reporters” and “whistleblowers” are essentially the same people. The stigma assigned to a “whistleblower” as a rogue and disloyal employee is inaccurate. Retaliation, as defined in this report, is a negative consequence experienced by an employee for reporting observed misconduct. While not all claims of retaliation have merit, some coming from disgruntled employees and others being the result of unfortunate miscommunications and/ or misperceptions, there are ramifications for every incident of misconduct that is observed by an employee. Companies that are committed to ethics work hard to address every claim of misconduct they receive and recognize that some claims will be substantiated. Whether substantiated or not, each claim and the means by which it is handled will leave the employee with an impression about the way things are done within the company. Even when retaliation is nothing more than a misperception, employee concerns merit attention. In a similar vein, given that as researchers we are not in a position to determine the veracity of victims’ claims, we respond as if each claim were retaliation and consider its potential impact on the company. © 2012 ETHICS RESOURCE CENTER | 3 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Retaliation: Why Does It Matter? Whether merely an errant perception (like being passed over for a promotion that she would not have received anyway), or an unequivocal experience of victimiza- tion (like receiving harassing calls or emails), retaliation against reporters has a profound impact on both the vic- tim and the company. When retaliation occurs, companies have two new prob- lems: 1 ) A second form of misconduct has been observed3 and a new victim emerges – the whistleblower; 2 ) Retribution against the reporter can create an environment that is cancerous to the organization. These new issues have major ramifications in terms of the victim’s commitment to her company and the likeli- hood that, going forward, she and her coworkers will alert management to problems they observe. Retaliation weakens employee commitment. When we looked at workers who observed and reported miscon- duct, two of three (67 percent) workers said they felt engaged in their company. When looking at this same 3. As stated previously, it may be the case that no actual wrongdoing took place. Nonetheless, even the perception of wrongdoing has ramifications in terms of the (perceived) victim’s workplace experiences as well as those he interacts with. PUTTING THE FINDINGS IN CONTEXT THE INCREASE IN RETALIATION IS HISTORIC The number of workers experiencing retaliation jumped by 2.3 million Americans from the 2009 NBES when 15 percent of reporters said they were retaliated against. In 2011, 22 percent of American workers who reported misconduct experienced retaliation, compared to 15 percent in 2009. Houston, Texas Population = 2.1 million* New Mexico Population = 2 million** * Houston (city), Texas. (2010). Retrieved from http://quickfacts.census.gov/qfd/ states/48/4835000.html ** 2010 Census Interactive Population Search: NM – New Mexico. (2010). Retrieved from http://2010.census.gov/2010census/popmap/ipmtext.php?fl=35 *** Albani, S. & Luczak, R. (2011, June 2). “The Daily Show with John Stewart” Tops the Competition in May as the Highest-Rated Late Night Talk Show among Persons 18-49, Persons 18-34, Persons 18-24, Men 18-34 and Men 18-24 [Press Release]. Retrieved from http:// www.comedycentral.com/press/press_ releases/2011/060211_daily-show-dominates-late-night-in-may.jhtml 4 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION group of reporters, but splitting them up based on who experienced retaliation, the engagement levels were dramatically different. Of those who experienced retali- ation, only 54 percent of the reporters said they felt en- gaged. In contrast, 72 percent of those reporters who did not experience retaliation felt engaged in their com- panies. RETALIATION LINKED TO DRAMATIC DECREASES IN EMPLOYEE ENGAGEMENT Not engaged Engaged 28% 72% 46% 54% Pe r c e n t a g e s o f E n g a g e d a n d No t E n g a g e d E m p l o y e e s 100% 80% 60% 40% 20% Did not experience Retaliation Experienced Retaliation Similarly, employees who experience retaliation are far more likely to leave imminently. Among all employees, only about one in 10 (11 percent) plans to leave within the year, but that number more than doubles (to 23 per- cent) among reporters who experience retaliation. And only about half as many victims of retaliation (31 per- cent) plan to stay for five years or more compared to employees in general (59 percent). EMPLOYEES EXPERIENCING RETALIATION INTEND TO LEAVE COMPANY MUCH SOONER Pe r c e n t a g e o f E m p l o y e e s P l a n n i n g t o St a y w i t h C o m p a n y f o r S p e c A m t o f T i m e 60% 40% 20% 11% ALL Employees 52% 31% 59% 14% 23% Employees Who Observed Then REPORTED MISCONDUCT Employees Who Reported Misconduct Then EXPERIENCED RETALIATION Less than one year More than five years or until retirement Not only are victims of retaliation less engaged and more likely to leave imminently, they are also significantly more likely to take their concerns outside the company. Fewer than half (46 percent) of those who reported and did not experience retaliation would consider reporting to the federal government or government agency if it meant losing their job. However, a sizeable majority (62 percent) of those who experienced retaliation would be willing to go to the federal government even if their job was at risk. © 2012 ETHICS RESOURCE CENTER | 5 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION One of the most common reasons that employees choose not to report misconduct is fear of retaliation. This has consistently appeared across Ethics Resource Center’s (ERC) research.4 Both reporters and nonre- porters take cues about the consequences for reporting from the experience of others who have reported. Once employees perceive that others are retaliated against for reporting, they will refrain from coming forward when they have concerns. Misconduct that goes unreported can continue, increasing risk, because management is never given the opportunity to address the problem. A Long-Term Look at Retaliation and the Troubling Picture it Paints Because of the many problems created by even a single incident of retaliation, the ERC has identified retaliation as a key topic in its National Business Ethics Survey.5 4. Nearly half (46 percent) of those who choose not to report observed misconduct cite fear of retaliation as the cause. Ethics Resource Center. (2005). National Business Ethics Survey®: How employees view ethics in their organizations 1994-2005. Washington, DC: Ethics Resource Center. 5. Although ERC surveyed NBES participants about retaliation prior to 2007, those data are not comparable. Prior to 2007, only reporters who indicated their dissatisfaction with the reporting process were asked whether they had experienced retaliation. Beginning in 2007, all those who observed then reported misconduct were asked about possible experiences of retaliation. Unfortunately, since 2007, retaliation has increased steadily. During this time period, reporting rates have also increased - but at a far slower rate. In the last five years, there has been an 83 percent increase in the rate of retaliation, but reporting has only increased by 12 percent.6 The increase in reporting is certainly positive news, but, as retaliation becomes more prevalent, it is likely to drive down reporting rates. RETALIATION RATES RISING FAR MORE QUICKLY THAN REPORTING Pe r c e n t a g e o f E m p l o y e e s R e p o r t i n g M i s c o n d u c t an d E x p e r i e n c i n g R e t a l i a t i o n 80% 60% 40% 20% 12% 63% 2007 2009 2011 65% 58% 15% 22% Reporting Rate Retaliation Rate 6. Rates of increase measure the magnitude of change. By nature, smaller initial numbers can increase more substantially than higher numbers. For example, an increase of five percent to 10 percent, while only a five percentage point increase, is a 100 percent increase in magnitude. An increase from 50 percent to 55 percent, however, is only a 10 percent increase in magnitude. 6 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Along with retaliation in general, several specific forms of retaliation have increased dramatically since 2009. Traceable retaliation (see description on page 10) has increased 27 percentage points (ppt)7 in just two years; traceable, managerial retaliation has increased as much as 17 ppt. STRIKING INCREASES IN SPECIFIC TYPES OF RETALIATION Pe r c e n t a g e o f T h o s e W h o Ex p e r i e n c e d R e t a l i a t i o n 80% 60% 40% 20% 4% 55% 2009 2011 43% 31% Managerial = = Not given promotions or raises Traceable Experienced physical harm to person or property Managerial & Traceable Relocated or reassigned Demoted 44% 27% 32% 18% 7. “Percentage points” (ppt) express the percentage-point change. For example, while an increase from five percent to 10 percent would be a 100 percent increase in magnitude, it would only be a five percentage-point increase. Not All Reports Are Created Equal: Reporting Location(s) & Retaliation Many companies already recognize the need to actively protect reporters from retaliation and to manage their perceptions so they do not feel retaliated against unin- tentionally. But it can be difficult to pinpoint when em- ployees are most likely to be at risk and who is the most vulnerable. Recognizing that reporting happens in many different ways, ERC explored how decisions about re- porting impact the likelihood of experiencing retaliation. We learned reporting rates vary considerably depend- ing on where a person chooses to report and how many times he sounds the alarm. Reporters who go to higher management, and especially to the hotline, are significantly more likely to say they ex- perienced retaliation. More than one in four (27 percent) employees who first report to higher management expe- rience retaliation, and 40 percent of whistleblowers who go first to the hotline experience retaliation. Far fewer employees (17 percent) who feel comfortable enough to report first to their supervisor end up experiencing retal- iation. It is likely that differences in retaliation rates by reporting locations are indicative of the seriousness of the kinds of misconduct being reported. It seems likely many reporters would choose to go to higher manage- ment when their supervisors are the ones who commit- ted the misconduct. Employees often report significant violations of the law (e.g., insider trading8) to the hotline because it provides an assurance of anonymity and pro- tection which an in-person report does not. 8. For example, insider trading is first reported to the hotline at a much higher rate (22 percent) than many other kinds of misconduct. By way of comparison, among all forms of misconduct, only five percent are reported to the hotline first. © 2012 ETHICS RESOURCE CENTER | 7 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Regardless of the location, it is essential that compa- nies promptly and thoroughly address any reports they receive, and make it clear reports have been taken seri- ously and are being addressed. Many reporters who do not feel sufficiently heard and/or who see misconduct persist feel compelled to report in multiple ways. With each additional reporting location the likelihood that a reporter becomes a victim of retaliation increases. Only 12 percent of those who reported to a single location experienced retaliation, compared to four out of five (80 percent) of those who reported in six different ways;9 basically, the more people a reporter tells, the greater the risk of retaliation. RETALIATION INCREASES ALONG WITH NUMBER OF REPORTING LOCATIONS7 Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g R e t a l i a t i o n 100% 80% 60% 40% 20% 12% 80% 1 2 3 4 5 6 Report Locations Cited 16% 23% 38% 60% 9. As stated previously, it may be the case that no actual wrongdoing took place. Nonetheless, even the perception of wrongdoing has ramifications in terms of the (perceived) victim’s workplace experiences as well as those he interacts with. Whistleblowers whose reports are substantiated are as likely10 to experience retaliation as reporters whose claims are not. Under Pressure: Situations That Put Employees at Risk Certain situations seem to breed perceptions of retali- ation. Again and again,11 we have found that pressure and stress are linked to increased retaliation. The ma- jority of reporters (52 percent) who feel pressure to compromise standards end up experiencing retaliation after reporting. But only 12 percent of reporters without such pressures experience retaliation. And, among em- ployees who observed misconduct and chose to report it, those who had to work harder than two years ago were more likely to experience retaliation than those who work about the same (30 percent vs. 17 percent). In addition to stressors at the individual level, business strategies and management decisions are linked to dra- matic changes in retaliation rates. Employees in com- panies with recent12 mergers and/or acquisitions are at 10. Analysis showed that there was no statistically significant difference between the two retaliation rates of those whose reports were substantiated and those who reports that were not. 11. E.g., Ethics Resource Center. (2010). 2009 National Business Ethics Survey®: Retaliation: The cost to your company and its employees. Arlington, VA: Ethics Resource Center. 12. Specifically, “recent” refers to any occurring within the last two years. 23 % 26 % 8 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION far greater risk of experiencing retaliation. At companies in transition, one in three (34 percent) reporters experi- enced retaliation; this is more than twice the number in more stable workplaces where 16 percent of whistle- blowers experienced retaliation. Retaliation rates also rose considerably when management responded to the recession by creating an environment of increased pres- sure and compelled compliance (see table below). Recession-survival tactics related to increased pressure and/or compelled compliance Retaliation Rates Among reporters who Disagree/ Strongly Disagree the tactic occurs Among reporters who Agree/ Strongly Agree the tactic occurs PPT Increase in Retaliation Rate Watched more by management 11%37%26 ppts Bad actors are laying low 16%36%21 ppts Employees are more cautious 17%29%13 ppts It is difficult to discern whether retaliation is actually more common in highly stressful environments or if it is merely that employees in such situations are more likely to perceive themselves as being victims. From the point of view of the victim and, in terms of retaliation’s nega- tive impact on the company, the outcome is the same. There is a critical lesson for management in companies undergoing stressful changes (e.g., in companies under- going mergers and acquisitions): be particularly mindful of whistleblowers’ feelings of vulnerability; make sure to provide adequate support and protection; and intention- ally manage expectations and perceptions. Who Is at Greatest Risk? The (Changing) Profile of the Victim To determine who is at the greatest risk of retaliation, we explored how company culture and demographic factors relate to rates of retaliation. The Appendix (p. 18) includes a full list of demographic groups at increased or decreased risk of each form of retaliation. Not sur- prisingly, many of the groups at heightened risk for spe- cific forms of retaliation mirror ERC’s earlier findings.13 But, in 2011, retaliation also rose sharply among some surprising groups. Retaliation is up among employees in positions of greater job security (e.g., unions and man- agement); those with increased power (higher levels of management); and employees with increased personal 13. See Ethics Resource Center. (2010). Supplemental research brief to the 2009 National Business Ethics Survey®: Retaliation: The cost to your company and its employees. Arlington, VA: Ethics Resource Center. © 2012 ETHICS RESOURCE CENTER | 9 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION security. In 2007 and 2009, members of unions were somewhat more likely to experience retaliation than their nonunion coworkers (by a difference of two ppts and eight ppts, respectively). In 2011, the percentage of union employees experiencing retaliation doubled, resulting in a 25 ppt difference between union and nonunion workers. Also, management status no lon- ger seems to bring with it protection from retaliation for reporting. For the first time in NBES history, manag- ers are now more likely to experience retaliation than nonmanagement employees. Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g R e t a l i a t i o n 60% 40% 20% 12% 42% 2007 2009 2011 14% 17% Union Nonunion GREATER DIFFERENCE IN RETALIATION RATES BETWEEN UNION MEMBERS AND NONUNION EMPLOYEES 21% 13% Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g R e t a l i a t i o n 60% 40% 20% 9% 24% 2007 2009 2011 15%19% Nonmanagement Supervisor/Management MANAGEMENT NOW MORE LIKELY TO EXPERIENCE RETALIATION 16% 14% 10 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Furthermore, the biggest jump in retaliation rates of all employee levels occurred among senior management. What is more, employees at higher management levels are more likely to experience traceable forms of retalia- tion. Traceable forms of retaliation are those that leave proof of having happened: physical harm, online harass- ment, harassment at home14, job shift, demotion, cuts to hours or pay. 14. Harassment at home might or might not leave traces, but could if it were a threatening phone call or property damage. SENIOR MANAGERS FACE GREATEST RISE IN RETALIATION SENIOR MANAGERS MORE LIKELY TO EXPERIENCE TRACEABLE RETALIATION Percentage of Reporters Experiencing Traceable Retaliation Senior Management Middle Management First Line Supervisor Nonmanagement 80%81%75%63% Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g R e t a l i a t i o n 30% 20% 10% 2007 2009 2011 Senior Management Middle Management First Line Supervisor Nonmanagement © 2012 ETHICS RESOURCE CENTER | 11 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Moving from one’s professional to personal situation, we see that traditional sources of security (finances and personal supports15) do not shield a reporter from retali- ation. Retaliation is significantly more common among whistleblowers whose financial situation has become more secure over the last two years (31 percent) than among those whose situation is less secure (22 percent) or about the same (19 percent). HIGHER RATES OF RETALIATION AMONG EMPLOYEES WHOSE PERSONAL FINANCIAL SITUATION IMPROVED Compared to two years ago, my personal financial situation is... Less Secure About the Same More Secure 78%69%81% 31%19%22% Did NOT Experience Retaliation Experienced Retaliation 15. Personal supports include family, religious community, neighbors, classmates, online friends, social clubs, and public resources. And the more a whistleblower feels supported person- ally, the more he/she is likely to experience retaliation. As reporters’ personal support becomes stronger, the likelihood of experiencing retaliation increases from one in seven, to one in five, and finally, among those with the strongest personal supports, to one in two. THOSE WITH MORE PERSONAL SUPPORTS ARE MORE LIKELY TO EXPERIENCE RETALIATION Extent of Personal Support 60% 40% 20% 24% 50% WEAK Feeling of Support MODERATE Feeling of Support STRONG Feeling of Support 14% Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g R e t a l i a t i o n 12 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION No Good Deed Goes Unpunished? Previous research16 conducted by ERC uncovered sever- al positive factors which empower employees to report (i.e., awareness; agency; security and investment; and support and connectedness). Unfortunately, it seems that these attributes also make one vulnerable to retali- ation; employees with greater supports and security are more likely to report and, therefore, report in situ- ations that put them at heightened risk for retaliation. For example, employees who are more supported and connected are more likely to report to the federal gov- ernment even at the expense of their jobs. Our data re- veal that one in three reporters willing to blow the whis- tle to the government experiences retaliation, far higher than the national retaliation rate of 22 percent. Also, supported and committed employees report repeatedly if their reports are not addressed, and each additional report brings with it an increased likelihood of retalia- tion. Finally, as the next chart illustrates, reporting and retaliation rates rise in tandem as one’s level of personal support increases. 16. See Ethics Resource Center. (2012). Inside the Mind of a Whistleblower: A supplemental report to the 2011 National Business Ethics Survey®. Arlington, VA: Ethics Resource Center. REPORTING AND RETALIATION RATES SIGNIFICANTLY HIGHER FOR THOSE WITH STRONG PERSONAL SUPPORT 14% 24% 50% Percentage Reporting Percentage Experiencing Retaliation Extent of Personal Support 100% 80% 60% 40% 20% 69% 83% Weak Moderate Strong 50% Pe r c e n t a g e o f R e p o r t e r s a n d P e r c e n t a g e E x p e r i e n c i n g R e t a l i a t i o n © 2012 ETHICS RESOURCE CENTER | 13 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION It appears that the positive aspects of a strong ethical culture, which increase support and encourage report- ing, put employees at risk. The more committed an em- ployee is to reporting, the more likely she is to report in situations that leave her vulnerable to becoming a victim of retaliation. The connection between increased support and heightened vulnerability to retaliation helps explain one of the most surprising findings of the 2011 NBES: while retaliation rates are up across the board, the most striking change is in companies with strong ethical cultures. In workplaces where employees at all levels demonstrate a commitment to integrity and ethi- cal business conduct, the rate of retaliation is nearly four times as high as in 2009. (It should be noted that re- taliation has risen comparatively little in weaker ethical cultures.)17 ALTHOUGH OVERALL RATES ARE UP, BIGGEST INCREASES ARE IN STRONG CULTURES 24% 19% Pe r c e n t a g e o f R e p o r t e r s Ex p e r i e n c i n g R e t a l i a t i o n 30% 20% 10% 4% 27% 2007 2009 2011 4% 15% Weak or Weak Leaning OVERALL Ethics Culture Strong or Strong Leaning OVERALL Ethics Culture 17. Some conjectures as to why retaliation might not have risen appreciably in weaker cultures are that: the rate is already high and might have hit its upper limit; employees report to fewer locations, decreasing the likelihood of a vast rise in retaliation, and; employees do not perceive retaliatory behavior as retaliation (it is the norm). What Can Be Done About It? Factors Linked to Lower Retaliation Rates Increasingly, retaliation is becoming a problem for em- ployees at all levels and in a variety of work situations. But victimhood is not inevitable. There are steps compa- nies can take to build nonretaliatory work environments which protect employees. Confirming past research,18 in 2011 the data demonstrate that ethics and compli- ance programs, strong ethical cultures, high standards of accountability that are consistently applied, and posi- tive management behaviors are all linked to a reduced likelihood of experiencing retaliation. Ethics and compliance programs are highly effective in reducing retaliation. In companies which lack all of the standard program elements,19 more than one in three (36 percent) reporters experiences retaliation. Retalia- tion rates decline steadily as the program improves. In fact, only one in 50 reporters at companies with com- prehensive ethics and compliance programs becomes a victim of retaliation. 18. See Ethics Resource Center. (2010). 2009 National Business Ethics Survey®: Retaliation: The cost to your company and its employees. Arlington, VA: Ethics Resource Center. 19. The six elements considered in the chart include: 1) written standards of ethical workplace conduct, 2) training on the standards, 3) company resources that provide advice about ethics issues, 4) a means to report potential violations confidentially or anonymously, 5) performance evaluations of ethical conduct, and 6) systems to discipline violators. A seventh element is a stated set of guiding values or principles. 14 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION AS THE NUMBER OF THE PROGRAM ELEMENTS INCREASES, RETALIATION DECREASES Ethics & Compliance Program Comprehensiveness 100% 80% 60% 40% 20% 24% 98% None or don’t know to all Fewer than six but at least one All six 36%Pe r c e n t a g e o f R e p o r t e r s E x p e r i e n c i n g or N o t E x p e r i e n c i n g R e t a l i a t i o n Furthermore, retaliation decreases when employees are prepared to handle situations which could lead to viola- tions of company ethics standards, company policy, or the law. This feeling of preparedness, which is linked to training20 efforts, relates to a decline in retaliation from 50 percent among reporters who feel poorly prepared or very poorly prepared to 19 percent among those feeling well prepared or very well prepared. 20. It is likely that training also helps employees have a clearer understanding of what does and does not constitute retaliation, preemptively reducing the number of employees who will feel retaliated against. Although (as noted previously) retaliation is up signifi- cantly in stronger ethics cultures,21 it is still true that there is less retaliation in companies where employ- ees at all levels share a commitment to integrity. As the graph below demonstrates, retaliation declines pre- cipitously when top management and supervisors make ethics a priority and model ethical conduct. In such workplaces, retaliation rates are half of those at com- panies with weaker ethical commitments. The ethical commitment of coworkers also has an impact in retalia- tion rates, albeit a less significant one. RETALIATION IS FAR LESS COMMON IN STRONGER ETHICS CULTURES 21. As we have seen, it appears that the marked increase in retaliation at companies with strong ethics cultures seems to be an unfortunate and troubling side effect of a positive trend. In stronger ethics cultures, employees feel more committed and supported. As a result, they feel empowered and beholden to report even in situations that put them in danger of experiencing retaliation. 76% 64% 2% Did NOT Experience Retaliation Experienced Retaliation Weak or Weak Leaning Strong or Strong Leaning 30% 14% Ethical Cultures 60% 40% 20% 30% 24% OVERALL TOP MGMT. SUPERVISOR 27% Pe r c e n t a g e o f R e p o r t e r s W h o Ex p e r i e n c e d R e t a l i a t i o n COWORKER 15%15%19% 30% 14% © 2012 ETHICS RESOURCE CENTER | 15 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION In terms of specific cultural factors that are drivers of re- taliation rates, accountability and the actions of man- agement are both important. A comparison of retalia- tion rates at companies with strong accountability (i.e., where employees agree that top management would be held accountable if caught violating the company’s eth- ics standards, company policy, or the law) to those with weaker accountability, reveals that accountability at all levels is critical. In workplaces where employees agree that top management would not get away with break- ing the rules, retaliation is far less common (17 percent vs. 42 percent) than in those with weak accountability. Accountability at the supervisor level is also associated with a 25 ppt decrease in retaliation rates. While a less dramatic difference occurs when nonmanagement em- ployees are held accountable, the improvement is still noteworthy. WHEN ACCOUNTABILITY IS HIGH, RETALIATION IS SIGNIFICANTLY LESS COMMON Accountability of Each Group 60% 40% 20% 43%39% Top Management SupervisorNon-Mgmt 42% Pe r c e n t a g e o f R e p o r t e r s W h o Ex p e r i e n c e d R e t a l i a t i o n Managers can take heart (and should take heed) that their actions and decisions have the power to curb re- taliation. When they are trustworthy and clearly com- mitted to ethics, retaliation is far less likely. In order to protect reporters (and encourage reporting in the future), managers should work to create a transparent environment where employees feel safe voicing their opinions and concerns and where trustworthiness and promise-keeping are the norms at all levels. In such environments, retaliation declines from 27 percent to 17 percent. The impact of each of these positive manage- ment behaviors is detailed below. RETALIATION IS FAR LESS COMMON IF MANAGEMENT IS TRUSTWORTHY & COMMITTED TO ETHICS 18%17%19% Strongly Disagree / Disagree That Each Group Is Held Accountable Strongly Agree / Agree That Each Group Is Held Accountable Employees can raise concerns to management without fear of retaliation My company does not tolerate retaliation against employees who report Trust supervisor to keep promises and commitments Trust top management to keep promises and commitments Trust coworkers to keep promises and commitments 35% 18% 45% 15% 46% 16% 35% 16% 41% 18% Percentage of Employees Experiencing Retaliation Strongly Disagree / Disagree Strongly Agree / Agree 16 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION What Is a Leader to Do? Steps That Management Can (& Should) Take When whistleblowers suffer retaliation (or even just per- ceive that they have been the targets of retaliation), what was once a single issue, i.e., the original act of miscon- duct that was observed, balloons into several complex problems. In addition to the precipitating event, there is now a second form of misconduct – the retaliation that took place. This has also created a new victim who is now more likely to report outside the company, perhaps to the media or a government agency, and who probably will not want to report in the future. She becomes less engaged in and committed to her work. And, as long as she remains with the company, she may share her story with colleagues, weakening their trust in leadership and making them less likely to report any misconduct that they observe. Retaliation is a problem that takes on a life of its own. Accordingly, we encourage leaders to: Assess your organization. Find out the extent to which employees believe they will experience retaliation for reporting misconduct. Conduct a survey of your employees, and ask them about their views of the reporting process and protection of individuals who come forward to report concerns. Target managers. Implement targeted anti- retaliation training so managers know how to recognize when reports are being made, accurately address them, move them through the system, effectively update reporters on the status of their reports (e.g., whether an investigation will take place) and interact with reporters in ways that are not perceived as being retaliatory. Communicate broadly among employees your company’s efforts related to the reporting process as well as its protections for those who report. Inform employees what the reporting process should look like so they feel reassured things are progressing appropriately. And it’s not enough just to provide training of managers. Other employees need to know that training is provided to their supervisors, so they will have more faith in their management if/ when they need to report. Move the investigation process along quickly and pay particular attention to individuals who report more than once. Many whistleblowers bring up their concerns in multiple ways, especially if they feel that they are not being heard and that no progress is being made. With each additional report, the likelihood that they will experience retaliation increases. Ensure procedural justice22 (and manage expectations about the reporting process) to avoid putting reporters in such a position. 22. In their report on procedural justice, the ERC Fellows note that when employees are aware of the process by which decisions are made, they are more likely to be accepting of the outcome. Specifically, we recommend that companies take concrete steps to communicate how they proceed through the decision-making process, how investigators are selected, and how they ensure the impartiality of the investigators. In addition, supplemental training for investigators on the principals of procedural justice is recommended to help increase the perception of a fair and just process. © 2012 ETHICS RESOURCE CENTER | 17 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Take steps to ensure retaliation does not happen. A zero-tolerance policy for retaliation is a recognizable symbol to employees but alone it might only be seen as a tool to coerce compliant behavior. Put in place systems and procedures that ensure confidentiality, provide for anonymity, and actively protect reporters – systems that help in determining if actions are retaliation and that show fairness and consistency are the norms in the company. When a claim of retaliation is substantiated, take action in a way that is both decisive and, to the extent possible, visible to employees. Accountability matters. As we have seen, in workplaces where employees feel that retaliation is not tolerated, retaliation is far less common. Track progress and periodically check up on reporters. Instead of merely hoping reporters will be safe, regularly check in with them after any investigation is complete to make sure they continue to be safe and feel supported. (For policymakers and enforcement officials): Encourage protections and follow-up by designing policy which encourages pre- emptive protection for whistleblowers. Include retaliation statistics as a key metric when judging the effectiveness of ethics and compliance programs. 18 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATIONAPPENDIX: OTHER FINDINGS & TRENDS WHO EXPERIENCES WHAT? DEMOGRAPHICS & SPECIFIC FORMS OF RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Experienced Retaliation in general 22%30-44 years-old (21%)3 45-63 years-old (18%)3 18-29 years-old (29%) 6-10 years tenure (16%)3-5 years tenure (25%) Privately held (18%)Publicly-traded (29%) Workers who do not supervise others (18%)Workers who supervise others (24%) Nonmanagement (19%)First line supervisors (27%) Workers who are not members of unions (17%) Members of unions (42%) Other employees gave a cold shoulder 62%18-29 years-old (56%)3 45-63 years-old (59%)3 30-44 years-old (75%) 1-2 years tenure (54%)3 6-10 years tenure (50%)3 3-5 years tenure (72%)3 11+ years tenure (72%)3 Privately held (51%)Publicly-traded (70%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. © 2012 ETHICS RESOURCE CENTER | 19 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Supervisor or management excluded from decisions and work activity 64%45-63 years-old (53%)18-29 years-old (72%) 6-10 years tenure (51%)3-5 years tenure (68%) Employees of U.S. companies operating in the U.S. only (54%) Employees of U.S. companies operating also in foreign countries (71%) Top management (48%)Nonmanagement (68%)3 Middle management (66%)3 Verbally abused by supervisor or someone else in management 62%45-63 years-old (54%)30-44 years-old (69%) First line supervisors (52%)Nonmanagement (70%) Verbally abused by other employees 51%18-29 years-old (42%)30-44 years-old (63%) 1-2 years tenure (44%)3-5 years tenure (61%) Privately-held (43%)Publicly-traded (61%) Workers who do not supervise others (41%)Workers who supervise others (58%) Nonmanagement (45%) First line supervisors (45%) Middle management (66%) Workers who are not members of unions (46%) Members of unions (60%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. 20 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Experienced physical harm to person or property 31%Females (16%)Males (41%) 45-63 years-old (24%)18-29 years-old (37%) 1-2 years tenure (20%)3 11+ years tenure (23%)3 3-5 years tenure (46%) Privately held (17%)Publicly-traded (42%) Employees of U.S. companies operating in the U.S. only (29%) Employees of U.S. companies operating also in foreign countries (44%) Workers who do not supervise others (20%)Workers who supervise others (35%) Nonmanagement (15%)First line supervisors (31%)3 Middle management (45%)3 Top management (38%)3 Workers who are not members of unions (17%) Members of unions (46%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. © 2012 ETHICS RESOURCE CENTER | 21 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Harassment online 31%Females (14%)Males (44%) 45-63 years-old (18%)18-29 years-old (30%)3 30-44 years-old (41%)3 1-2 years tenure (19%)3 6-10 years tenure (25%)3 11+ years tenure (26%)3 3-5 years tenure (53%) Privately held (23%)Publicly-traded (43%) Workers who do not supervise others (13%)Workers who supervise others (44%) Nonmanagement (13%)Top management (57%) Workers who are not members of unions (18%) Members of unions (53%) Harassment at home 29%Females (19%)Males (36%) 45-63 years-old (13%)18-29 years-old (35%)3 30-44 years-old (39%)3 6-10 years tenure (21%)3 11+ years tenure (22%)3 3-5 years tenure (40%) Privately held (19%)Publicly-traded (37%) Workers who do not supervise others (15%)Workers who supervise others (36%) Nonmanagement (11%)Middle management (43%)3 Top management (45%)3 Workers who are not members of unions (14%) Members of unions (47%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. 22 | © 2012 ETHICS RESOURCE CENTER 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Not given promotions or raises 55%Females (37%)Males (68%) 11+ years tenure (49%)3-5 years tenure (65%) Privately held (46%)Publicly-traded (65%) Nonmanagement (46%)First line supervisors (67%) Relocated or reassigned 44%45-63 years-old (30%)18-29 years-old (50%)3 30-44 years-old (50%)3 1-2 years tenure (17%)3-5 years tenure (61%) Privately held (40%)Publicly-traded (52%) Nonmanagement (37%)Top management (57%) Workers who are not members of unions (37%) Members of unions (58%) Demoted 32%Females (26%)Males (36%) 1-2 years tenure (26%)3 11+ years tenure (28%)3 3-5 years tenure (42%) Privately held (23%)Publicly-traded (45%) Workers who do not supervise others (20%)Workers who supervise others (40%) Nonmanagement (19%)First line supervisors (38%)3 Middle management (39%)3 Top management (54%)3 Workers who are not members of unions (25%) Members of unions (44%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. © 2012 ETHICS RESOURCE CENTER | 23 2011 NBES SUPPLEMENTAL RESEARCH REPORT | RETALIATION Form of retaliation Percentage Groups LEAST likely to experience this form of retaliation1,2 Groups MOST likely to experience this form of retaliation Hours or pay cut 46%45-63 years-old (39%)18-29 years-old (54%) 1-2 years tenure (32%)3-5 years tenure (50%) Almost lost job 56%45-63 years-old (47%)18-29 years-old (60%) 1-2 years tenure (44%) 3 6-10 years tenure (42%) 3 3-5 years tenure (61%) Workers who are not members of unions (48%) Members of unions (65%) Other 14%Males (8%)Females (20%) 18-29 years-old (7%) 3 30-44 years-old (8%) 3 45-63 years-old (25%) 1. All numbers in the LEAST and MOST categories are significantly different from each other. 2. The following groups were too small and were not included in the analysis: Age: 64 years-old and older Tenure: less than one year Foreign vs U.S.: Foreign companies operating in the U.S. 3. These demographic groups are not significantly different from each other, but are significantly different from the opposite (LEAST/ MOST) demographic group. NATIONAL BUSINESS ETHICS SURVEY® SUPPLEMENTAL REPORTS A Supplemental Report on Generational Differences is Coming Soon. HELP SUPPORT ERC’S NATIONAL BUSINESS ETHICS SURVEY® Since 1994, ERC has conducted its business ethics survey with financial support from companies who recognize its value. NBES is disseminated free of charge. Over the years, it has become a highly effective research instrument, relied upon by ethics professionals, executives, academics and policy makers as the U.S. benchmark for ethics in the workplace. Our supporters receive well-deserved recognition and gratitude, as well as a wealth of useful information and analysis. For more information, visit www.ethics.org © 2012 ETHICS RESOURCE CENTER | 25 Generational Differences In this update to the popular 2009 report, ERC will investigate how age, generational cohort, and time in the workforce impact ethics experiences at work. Key questions include: Do different generations observe different kinds of misconduct? Are different generations equally likely to report misconduct when observed? What factors drive reporting decisions in each age group, and what sorts of targeted efforts can management take to maximize reporting? Social Networkers in the Workplace One of the key findings of NBES 2011 was the unique–and often troubling–experiences of active social networkers. This report will investigate key questions related to this important movement in the workplace: Who are active social networkers, and how do their beliefs about their companies compare to non-networkers? How can companies support active social networkers and leverage opportunities to make social networking a positive force for creating stronger ethics cultures? OVERVIEW OF UPCOMING SUPPLEMENTAL REPORTS The report was made possible in part by generous contributions from our sponsors: For more information, please contact: Ethics Resource Center 2345 Crystal Drive, Suite 201 Arlington, VA 22202 USA Telephone: 703.647.2185 FAX: 703.647.2180 Website: http://www.ethics.org Email: ethics@ethics.org